Trade Liberalization May Be Harmful under Endogenous Differentiation

Lambertini, Luca (1998) Trade Liberalization May Be Harmful under Endogenous Differentiation. Bologna: Dipartimento di Scienze economiche DSE, p. 20. DOI 10.6092/unibo/amsacta/775. In: Quaderni - Working Paper DSE (262). ISSN 2282-6483.
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Abstract

The consequences of free trade are investigated in an international duopoly under horizontal differentiation and convex transportation costs. It is shown that the smaller country may benefit from trade if it is sufficiently small to allow for a significant volume of exports by the domestic firm. On the contrary, the larger country never benefits from trade, since liberalization decreases the domestic firm’s profit more than it increases consumer surplus.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Keywords
autarky free trade horizontal differentiation
Subjects
ISSN
2282-6483
DOI
Deposit date
17 Jun 2004
Last modified
15 Apr 2016 10:06
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